Correlation Between Qantas Airways and China Southern
Can any of the company-specific risk be diversified away by investing in both Qantas Airways and China Southern at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Qantas Airways and China Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qantas Airways Limited and China Southern Airlines, you can compare the effects of market volatilities on Qantas Airways and China Southern and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Qantas Airways with a short position of China Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qantas Airways and China Southern.
Diversification Opportunities for Qantas Airways and China Southern
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qantas and China is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Qantas Airways Limited and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines and Qantas Airways is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Qantas Airways Limited are associated (or correlated) with China Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of Qantas Airways i.e., Qantas Airways and China Southern go up and down completely randomly.
Pair Corralation between Qantas Airways and China Southern
Assuming the 90 days horizon Qantas Airways Limited is expected to generate 0.26 times more return on investment than China Southern. However, Qantas Airways Limited is 3.79 times less risky than China Southern. It trades about 0.1 of its potential returns per unit of risk. China Southern Airlines is currently generating about -0.11 per unit of risk. If you would invest 340.00 in Qantas Airways Limited on December 30, 2023 and sell it today you would earn a total of 10.00 from holding Qantas Airways Limited or generate 2.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Qantas Airways Limited vs. China Southern Airlines
Performance |
Timeline |
Qantas Airways |
China Southern Airlines |
Qantas Airways and China Southern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qantas Airways and China Southern
The main advantage of trading using opposite Qantas Airways and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qantas Airways position performs unexpectedly, China Southern can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Southern will offset losses from the drop in China Southern's long position.Qantas Airways vs. Ryanair Holdings PLC | Qantas Airways vs. Delta Air Lines | Qantas Airways vs. Southwest Airlines | Qantas Airways vs. China Eastern Airlines |
China Southern vs. Ryanair Holdings PLC | China Southern vs. Delta Air Lines | China Southern vs. Southwest Airlines | China Southern vs. China Eastern Airlines |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |